FAR the book, page-35

On Aussie Oil & Gas Observer. Link here. Have to go to 15th July Blog by scrolling down. Other blogs on situation too.

https://aussieoiloiloilandgas.wordpress.com/

SC

Company news – Woodside Petroleum (WPL) and FAR
Some further developments following our commentary yesterday on WPL’s acquisition of Conoco’s stake in Senegalese licences in which junior FAR has a 15% stake

• FAR came out of its trading halt yesterday, and contrary to our expectations, managed to somewhat reverse its earlier share price fall. It was still down 10% on the day, is flat so far today – but things could have been a lot worse if the market had priced it on a look-through basis.
• The fact that the market did not reflects a few things: recognition that WPL got a very good deal; WPL’s presence substituting a willing developer for a somewhat reluctant one – and possibly, the option value of FAR’s pre-emptive rights.
• The Australian Financial Review noted today that the other JV partner – LSE listed Cairn Energy – was rumoured to be mulling over its pre-emptive rights. If FAR could find the short term finance to join in on any such move, it could well represent what will be seen in a few year’s time as superb deal-making (note – we still hold our FAR shares…..).
• London based industry blogger, Malcy’s Blog, has been a long time supporter of this asset and FAR’s exposure thereto. His view on the respective deal making skills here:

“Buying a class asset at $2.20/bbl is outstanding and COP have given away an asset in order to pay the dividend, such things happen in these markets and WPL will in due course be applauded for making a superb, counter cyclical move.”